Thursday, February 28, 2008

High costs force Chinese firms to outsource

Laws of economics apply to everyone - even China. Chinese companies have to do what is rational. They have to limit themselves to what they do best and outsource to cheaper suppliers. Do they blame George Bush? The Washington Times
Outsourcing has hit the hub of China's Pearl River Delta, with soaring costs pushing the world's longtime workshop for low-cost goods to move its factories overseas. Rising raw material and energy prices, the strengthening of the yuan against the dollar and new business regulations are forcing labor-intensive factories — particularly those in the footwear, toy and clothing industries — to hunt for rock-bottom production costs elsewhere. Many are choosing to move abroad to low-cost countries such as Vietnam and Indonesia, while others are seeking cheaper places to do business in China.

No comments: